Travelers profit drops 21% in first quarter
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Travelers Cos. Inc. reported net income of $833.0 million in the first quarter of 2015, a 21% decrease from the same period a year earlier that the property/casualty insurer attributed primarily to lower investment income, lesser prior-year reserve developments and slightly higher catastrophe losses.
Meanwhile, net written premiums increased slightly to $5.90 billion from $5.87 billion in the prior-year quarter on positive renewals in all segments and higher U.S. retention rates, among other factors, the insurer said Tuesday in a statement.
Total revenue decreased 1% to $6.63 billion.
Despite strong underwriting results across all business units, Travelers' combined ratio increased 3.2 points to 88.9%, Chairman and CEO Jay Fishman said during a Tuesday conference call with analysts.
The 88.9% combined ratio was a result of “a higher underlying combined ratio (2.1 points), lower net favorable prior year reserve development (1.0 points), and higher catastrophe losses (0.1 points),” according to the statement.
Mr. Fishman called the company's performance “encouraging,” but also said the insurer is watching catastrophe losses.
Pretax catastrophe losses were $162 million in the first quarter this year vs. $149 million last year, primarily from winter storms on the East Coast and prolonged drought on the West Coast.
“Weather patterns do seem to be different,” Mr. Fishman said during the conference call. “This change, when combined with increased real estate development, causes us to be very attentive to incorporating the real cost of weather uncertainty in our business.”
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